Housebuilder reports strong year at half way point

YORK housebuilder Persimmon is continuing to capitalise on improving housing market conditions in the first half of the year with "strong" increases in underlying pre-tax profits and revenue.

Posting its half year results for the six months ending June 30, the Fulford based company saw turnover surpass the billion pound mark, increasing 33 per cent from £900 million in the first half of 2013 to £1.2 billion in 2014.

Selling 6,408 new homes in six months, representing a rise of 28 per cent on the same period last year, Persimmon reported a 57 per cent increase in underlying pre-tax profits from £135.3 million to £212.9 million.

The firm, which employs 105 of its 2,500 staff at its York headquarters, invested in 14,251 plots of land in the period bringing its total consented landbank to 82,250 plots.

"Our success in opening 175 new sites last year and 90 new site in the first half of this year has refreshed our strong outlet network.

"The open market for land has offered attractive investment opportunities that will produce excellent returns in the future.

"We remain focussed on mitigating build costs pressures and working with our supply chain partners and site teams to deliver efficient build costs.

"We anticipate that mortgage lenders will continue to actively develop their participation in the UK mortgage market over the medium term. A return to growth in monthly mortgage approvals in June this year, which was 14% ahead of the prior year level, is encouraging.

"Disciplined lending in support of a keen appetite to purchase newly built homes from both first time buyers and existing home owners provides the opportunity for the housebuilding industry to increase construction activity."

The firm said the results demonstrates its ability to successfully execute a ten year strategic plan, launched in 2012, which will see £1.9 billion of surplus captial paid to paid to shareholders by 2021.

At the half year mark Persimmon had forward sales of £1.53 billion, 22 per cent ahead of the same time last year.

Group chief executive Jeff Fairburn added: "Persimmon has produced another strong performance in the first half of 2014, taking advantage of the current market opportunities to deliver growth whilst strengthening the financial position of the business.

"As we have entered the traditionally slower summer trading weeks, we have been encouraged by our private sale reservation rate since July 1 which is currently running 9 per cent ahead of the same period last year."